Union demands have drained our survival reserves, paint industry body says

29 April 2020 | Web Article Number: ME202018959

Chemical & Allied Industries
Commerce & Trade
Finance & Investment

THE COVID-19 pandemic should serve as a lesson to SA trade unions whose demands constantly diminish companies’ ability to create sufficient reserve capital to survive such ordeals.

That’s according to Deryck Spence, Executive Director of the SA Paint Manufacturing Association (SAPMA), who said many trade unions had called for the annual profit of a company to be divided equally among all employees.

“Arguments regarding the profits being kept in reserve for future capital expenditure for expansion, equipment breakdowns, or other unforeseen emergencies such as the current pandemic, fall on deaf ears,” he said.

Spence added that unions had also been distinctly silent on the question that if profits were indeed to be shared among staff and workers annually, would staff then be willing to dig into their “windfall earnings” to contribute funding for such unexpected requirements?

He said trade unions do not realise that capital, retained earnings, business strategy and know-how must be earned to sustain profitable and growing businesses, enterprises that make profit and employ workers and, most importantly, pay tax to keep the fiscus ticking over.

“After this period of lockdown and introspection, when we wonder how to sustain and maintain our companies, pay staff and workers, pay rent or mortgage, and keep families fed, perhaps employees will appreciate employment offered by business enterprises, and the benefits derived by role players both big and small, in sustaining our economy. Perhaps, also, trade unions will remember that unrealistic demands inevitably bring severe hardships for their own members.

“In any event, the recognised national rationale for trade unions is not to function as labour market monopolies, to raise wages above competitive levels set by the market, and create inefficiencies resulting in the loss of jobs and in greater income inequality in the workforce,” Spence said.

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